Gold demand in China remained robust, touching a record high of 255.2 tonne during the January-March quarter, boosted by the New Year holidays and worries over inflation, World Gold Council report said.
"China and India have seen continuing economic growth and whilst China's economy is expected to slow, it will nonetheless surpass the rates of growth in the west.
"As we previously forecast, it is likely that China will become the largest source of demand for gold in 2012," WGC Managing Director, Investment, Marcus Grubb said in a release issued today.
China's investment and jewellery demand reached 255.2 tonne, which is up by 10% on the previous year's levels.
Investment demand went up 13% with a quarterly record of 98.6 tonne, from Q1 of 2011, demonstrating investors' continued need to preserve wealth amidst ongoing concerns over inflation, the report said.
Jewellery demand in China also increased significantly to 165.6 tonne up 7%, accounting for 30% of global jewellery demand, making the country the largest market for the third consecutive quarter.
The growth story also extends to other emerging market economies and is reinforced by central banks' continued buying of gold, as a diversifier and a preserver of national wealth, Grubb pointed out.